Page 3 - Policy Economic Report - April 2023

Policy and Economic Report:
Oil & Gas Market

Executive Summary

IMF has projected the global growth to fall from 3.4% in FY 2022-23 to 2.8% for the current year FY 2023-
24 and at 3% for FY 2024-25. Many factors such as the global shocks emanating into the financial sector
due to Russian-Ukraine war crisis as well as the recent financial sector turmoil within the banking sector
has translated into this global economic slowdown, as per IMF.

For advanced economies, due to unexpected failure of specialized banks in the US, growth is projected to
decline from 2.7% in 2022 to 1.3% in 2023, before rising to 1.4 % in 2024. In the euro area and the United
Kingdom, growth is expected to fall to 0.7 % and –0.4 %, respectively, this year before rebounding to 1.8%
and 2.0 % in 2024, while the U.S growth is projected at 1.6% for FY 2023-24.

As far as India is concerned, Asian Development Bank (ADB) projects growth in India’s gross domestic
product (GDP) to moderate to 6.4% in FY 2023-24 and rise to 6.7% in FY 2024-25, driven by private
consumption and private investment on the back of government policies to improve transport
infrastructure, logistics, and the business ecosystem. Improving labor market conditions and consumer
confidence is expected to drive growth in private consumption. The central government’s commitment to
significantly increase capital expenditure in FY2023, despite targeting a lower fiscal deficit of 5.9% of GDP,
will also spur demand.

As per National Statistical Office (NSO), India’s real gross domestic product (GDP) grew at 7% in 2022-23,
with private consumption and public investment as the major drivers of growth. Economic activity
remained resilient in Q4. Rabi foodgrains production is expected to increase by 6.2 % in 2022-23. The
index of industrial production (IIP) expanded by 5.2 % in January while the output of eight core industries
rose even faster by 8.9 % in January and 6.0 % in February, indicative of the strength of industrial activity.

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